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everybody this is exercise 3-2 on the week 7 quiz access for chapter 3. i had a couple students with questions so i thought id work it out for everyone and just sort of talk through what it means i think i think maybe thats the bigger issue at hand is is what does each of these items mean so it says for each of the following separate situations determine the amount of expense each company should recognize in december uh using accrual basis accounting so remember with accrual basis accounting instead of worrying about when cash changes hands were going to worry about when expenses were incurred or revenues were earned and we will record them appropriately in those periods when they were so for expenses we will record them when theyre incurred incurred means when we have i guess earned the expense meaning when weve received goods or services from someone else thats when well have incurred the expense so lets just take a look at the first one chipotle has monthly wages expense of